On-Track to Meet Annual Guidance
TORONTO--(BUSINESS WIRE)-- New Gold Inc. (“New Gold” or the “Company”) (TSX and NYSE American: NGD) reports first quarter results for the Company as of March 31, 2019. (All amounts are in U.S. dollars unless otherwise indicated)
A conference call and webcast will follow to discuss these results at 8:30 a.m. Eastern time (details are provided at the end of this press release).
(For detailed information, please refer to the Company’s First Quarter Management’s Discussion and Analysis (MD&A) and Financial Statements that are available on the Company’s website at www.newgold.com and on SEDAR at www.sedar.com . The Company uses certain non-GAAP financial performance measures throughout this press release. Please refer to the “Non-GAAP Financial Performance Measures” section of this press release and in the MD&A.)
First Quarter Highlights
Highlights for the first quarter include:
Total production of 123,263 gold equivalent (eq.) ounces (79,398 ounces of gold, 136,513 ounces of silver and 19.5 million pounds of copper) at average realized gold and copper prices1 of $1,301 per ounce and $2.79 per pound, respectively. Production is on track to meet annual guidance of 465,000 to 520,000 gold equivalent ounces.
Revenues of $167.9 million.
Operating expense of $645 per gold eq. ounce, on track to meet annual guidance of $690 to $790.
All-in sustaining costs (AISC)1 of $1,083 per gold eq. ounce, on track to meet annual guidance of $1,330 to $1,430.
Net loss from continuing operations of $13.4 million ($0.02 per share).
Adjusted net loss1 from continuing operations, which excludes other gains and losses, was $1.8 million ($0.00 per share).
Operating cash flow generated from continuing operations of $74.3 million ($0.13 per share). Operating cash flow generated from continuing operations, before changes in non-cash operating working capital1, was $71.1 million ($0.12 per share).
“We are encouraged by the progress made at Rainy River during the first quarter as we re-position the operation for efficient and sustainable mining. Over the course of the year, we expect to drive further efficiencies throughout the operation with the objective of delivering free cash flow starting in late 2020,” stated Renaud Adams, CEO. “The New Afton Mine reported another strong quarter of operating results as the team further advanced the development of the C-zone. We are particularly encouraged with the organic growth potential of the D-zone with the first hole of the exploration drilling program intersecting 140 metres of mineralization located 360 metres below the C-zone and a second hole is currently underway.”
Financial Highlights (Continuing Operations 1 )
First Quarter 2019 First Quarter 2018
Revenues from mining operations 167.9 147.5
Net earnings (loss), per share (0.02) (0.05)
Adj. net earnings (loss)2 per share (0.00) (0.03)
Operating cash flow, per share 0.13 0.07
Adj. operating cash flow2, per share 0.12 0.09
1. Continuing operations include the Rainy River, New Afton and Cerro San Pedro Mines.
2. Refer to the “Non-GAAP Performance Measures” section of this press release.
1. Refer to the “Non-GAAP Performance Measures section of this press release.
Revenues for the quarter from continuing operations were $167.9 million, an increase over the prior-year quarter due to an increase in gold ounces sold, offset by a decrease in average realized prices.
Net loss for the quarter was $13.4 million, or $0.02 per share, and adjusted net loss was $1.8 million, or $0.00 per share, which improved over the prior-year quarter due to the increase in revenue.
The March 31, 2019 cash balance was $132.3 million.
Operational Highlights (Continuing Operations 1 )
First Quarter 2019 First Quarter 2018 Guidance 2019
Gold eq. production (ounces) 2,3 123,263 119,075 465,000 – 520,000
Gold production (ounces) 79,398 63,771 300,000 – 335,000
Copper production (Mlbs) 19.5 22.2 75 – 85
Average realized gold price, per ounce4 1,301 1,331 -
Average realized copper price, per pound4 2.79 3.14 -
Operating expense, per gold eq. ounce3 645 760 -
Total cash costs, per gold eq. ounce3,4 697 828 740 - 820
AISC, per gold eq. ounce3,4 1,083 1,373 1,330 - 1,430
Sustaining capital and sustaining leases ($M)4
44.7
55.5 255 - 285
Growth capital ($M)4 7.8 12.7 50 - 55
1. Continuing operations include the Rainy River, New Afton and Cerro San Pedro Mines.
2. All production and cost figures exclude production from Cerro San Pedro residual leaching.
3. Gold equivalent ounces produced includes silver ounces and copper pounds converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period.
4. Refer to the “Non-GAAP Performance Measures” section of this press release.
Rainy River Mine Highlights
First Quarter 2019 First Quarter 2018 Guidance 2019
Gold eq. production (ounces) 1 62,278 40,016 250,000 – 275,000
Gold eq. sold (ounces)1 71,483 41,621 -
Gold produced (ounces) 61,557 39,325 245,000 – 270,000
Gold sold (ounces) 70,695 40,880 -
Average realized gold price, per ounce2 1,295 1,328 -
Operating expense, per gold eq. ounce 801 1,240 -
Total cash costs, per gold eq. ounce2 801 1,240 870 - 950
AISC, per gold eq. ounce2 1,330 2,427 1,690 - 1,790
Sustaining capital and sustaining leases ($M)2 36.6 48.9 210 - 230
Growth capital ($M)2 3.8 10.2 ~3.0
1. Gold equivalent ounces for Rainy River include silver ounces produced converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for Q1 2019 was calculated based on average spot market prices of $1,304 per gold ounce and $15.57 per silver ounce. The ratio for Q1 2018 was calculated based on average spot market prices of $1,329 per gold ounce and $16.77 per silver ounce.
2. Refer to the “Non-GAAP Performance Measures” section of this press release.
Q1 18 Q2 18 Q3 18 Q4 18 Q1 2019
Tonnes ex-pit mined per day (ore and waste) 112,432 107,416 102,290 111,507 111,679
Ore tonnes mined per day 36,296 36,043 30,439 32,054 15,739
Operating waste tonnes per day 54,321 43,570 23,333 67,406 62,955
Capitalized waste tonnes per day 21,816 27,802 48,518 12,047 32,986
Strip ratio (waste:ore) 2.1 1.98 2.36 2.48 6.10
Tonnes milled per calendar day 17,534 16,549 16,962 20,668 19,725
Gold grade milled (g/t) 1.08 1.24 1.21 1.42 1.19
Gold recovery (%) 81% 87% 87% 89% 90%
Mill availability (%) 77% 74% 76% 80% 89%
Gold production (oz) 39,325 55,219 55,538 77,202 61,557
The Rainy River Mine reported in-line gold equivalent production of 62,278 ounces (61,557 ounces of gold and 60,383 ounces of silver) for the quarter. As previously disclosed, production during the quarter included planned lower grades as mining operations continued the transition to phase 2 of the mine plan.
Operating expense per gold eq. ounce was $801 for the quarter, which is a 35% decrease over the prior-year quarter, driven by improved operational performance and increased metal production and sales volumes achieved in the current year quarter.
All-in sustaining costs (AISC) per gold eq. ounce for the quarter were $1,330, which included $10 million of capitalized stripping costs ($140 per gold eq. ounce), and $27 million of other sustaining capital expenditure and lease payments. AISC per gold eq. ounce for the quarter declined by 45% over the prior-year quarter due to improved operational performance and an increase in metal production and sales volumes coupled with a decrease in sustaining capital. It is expected that sustaining capital will be higher in the second and third quarters when weather conditions are more favourable for infrastructure and tailings construction and will decline in the fourth quarter.
Growth capital for the quarter was $3.8 million, related to underground mine development, working capital payments and the transfer of infrastructure from the contractor.
During the quarter, approximately 1.4 million ore tonnes and 8.6 million waste tonnes (including 2.97 million capitalized waste tonnes) were mined at an operating strip ratio of 6.10:1. Mining operations in the quarter were primarily focused on waste stripping to expose ore for mining in future quarters. Additionally, 0.9 million tonnes of out-pit non-acid generating (NAG) material were mined in preparation for planned dam raises scheduled to begin during the second quarter.
Mill throughput for the quarter averaged 19,725 tonnes per day, below the annual target of 22,000 to 24,000 tonnes per day. The lower average mill throughput was negatively impacted by the significant buildup of ice in the crushed ore stockpile above the apron feeders. Average mill throughput returned to target levels at the end of the quarter.
Mill availability for the quarter was a record 89% (95% in March), despite the planned downtime to replace the ball mill trunnion and complete repairs.
Gold recovery improved to average 90% for the quarter, a significant improvement over the 89% reported in the fourth quarter when considering the 16% lower average grade milled. Recoveries are expected to continue to improve throughout the year to an average of 90-92% for the year.
During the first quarter of 2019, the Company launched a comprehensive optimization study that includes the review of alternative open pit and underground mining scenarios with the overall objective of reducing capital and improving the return on investment over the life of mine. An updated life of mine plan is anticipated to be completed in the fourth quarter.
A strategic exploration drill program is expected to begin in the second quarter that will test near-mine targets in the Intrepid North area.
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